FEMA has been taking a bit of a bashing in the media about the misuse of their
cash cards by Katrina victims. Dark mutterings about incompetence and mismanagement
have been heard. I think the complaints are misguided to a great degree. (caveat-I
am no fan of FEMA since its incorporation into DHS) First, there is no system of
disbursement and tracking which will completely eliminate the potential for fraud.
Second, the choice to proceed with the cash card program was a calculated one,
which balanced the greater potential for misuse against the need for immediate
and massive aid.

At this time, the Red Cross has two disbursing systems in place. One is a cash card system like FEMAs. The other is a system more like a purchase order. The problems with the purchase order system are legion in a situation where you are trying to get as much aid as possible to as many people as possible, in the shortest possible time. The purchase orders must be made out, by hand, one at a time, to specific merchants, for specific items, for a specific amount. If the items are unavailable or that merchant is out of stock, a new purchase order must be made out, after recovering the old one. In a Katrina-scale disaster, there simply aren't enough people, nor hours in the day, to get this job done. The greater the control, the longer the delay. I have no doubt that had we used the purchase order system, a significant segment of the victims would still be visiting case workers to iron out the problems.

So, I think FEMA made the right call: disburse as rapidly and widely as possible, and investigate the fraud you can detect later on. Does that mean some folks will get away with it? Yes. It also means a whole lot of folks get their lives restarted sooner rather than later. That's a tradeoff I can live with.